Sunday, May 10, 2015

The Charleston Saga: The Embodiment of Lucre and Malice (Updated)

UPDATE (5/13):  jackiechiles on JD Underground found this link from a recent faculty meeting.

In case you missed it, Charleston School of Law is the rectum of its existence, well-poised to be law school number two to be flushed into oblivion as the law school bubble collapses (unless, I guess, Indiana Tech beats it?) barring a salvation thrust by InfiLaw or some other angel investor.

What follows is a proposed timeline of what went wrong followed by some straightforward analysis.

For those of who take a tl;dr approach to this blog, I'll provide the bullet point up front:  this school is the most blatant public example of a reverse Robin Hood generational wealth transfer seen in recent times.

Timeline

May 12, 2003:  CSOL is founded.
  • Problem 1:  Despite the warm words of pseudo-elites who should know better, South Carolina did not need a second law school.  Really, this should be problems 1-10 by itself.
  • Problem 2:  The school is founded as a for-profit institution.  Not that non-profit law schools behave substantially better, but there are special pitfalls with for-profit institutions, one of which bites them in the ass about a decade later.  And this wasn't some honest mistake by business people who didn't think through the LLC vs. 501(c)(3) debate, or a cold profit calculation by a nasty corporation.  The school was founded by three judges and two prominent lawyers.
  • Problem 3:  The five founders of the school should have easily anticipated a succession crisis of some kind.  Hon. Alex Sanders (B.S. '60), Ralph McCullough (B.A. '62), Ed Westbrook (B.E. '74), Hon. George Kosko (B.S. '66), and Hon. Robert Carr (B.S. '67) were almost certainly all over 55 when the school's first class graduated.  With the (hopefully) perpetual life of a law school, they needed to have a stronger plan in place for transitioning the school to new shareholders or some non-profit foundation or something.
Fall 2004:  CSOL begins accepting students.  Operating capital for CSOL in the start-up phase comes primarily from Westbrook.  Kosko and Carr each sign $400,000 notes to Westbrook that they plan to repay over a five-year period.  Instead of projected incoming classes having 125 members (all full time), they now have 135 full time students and 65 evening students.  Kosko and Carr's notes are paid off in two years and the gravy train is rolling.
  • Problem 4:  Judges of all people are taking on sizable personal debt to be repaid through the school's profits, which will be derived from student tuition revenue, much of which comes from federal student loan dollars.  In theory, literally anyone could have borrowed a ton of cash, started a law school, siphoned off profits to repay the loan, and then enjoy the income stream from the equity.  But let's not kid ourselves.
 December 2 2006:  After delaying its decision, the relevant ABA committee grants provisional accreditation to CSOL.
  • Problem 5:  The ABA seems to accredit anyone with a big league law library and a "commitment to diversity."  
May 19, 2007:  CSOL graduates its first class.  "'These are our pioneers,' Charleston School of Law Dean Richard Gershon said."  The keynote speaker "invoked names like Patrick Henry, Thomas Jefferson, Abraham Lincoln and Franklin D. Roosevelt."
  • Problem 6:  Not really a problem problem, but who the shit are we kidding?  Also, 75% of those guys never went to law school, and the one of did went to Columbia.  75% were also wealthy.
 2010 - 2013:  The five owners of CSOL withdraw ~$25 million in profits according to an attorney for InfiLaw.  (Note: this fact is corroborated by numerous other sources).  The founding dean refers to at least two of the founders/board members (Kosko and Carr) as "embodiment of lucre and malice."
  • Problem 7:  Because it's for-profit, apparently there is little transparency and oversight to this sort of thing.  Doesn't is seem like the ABA is asleep at the wheel on the HMS Justice?  It seems the ABA could require financial transparency as a condition of accreditation, or that they could simply make stringent financial review an annual rite for operating law schools.


  • Problem 8:  Sucking $25 million out of a business during a downturn shows there is no serious intent to keep the business afloat.  By 2011, literally everyone in legal education could foresee the coming tumult, while everyone outside of legal education was poised for economic recovery.  Profits should have been stowed in a rainy day fund, not withdrawn for His Honor's retirement account.  If a quick sale to InfiLaw was always the exit strategy, they'd see the money eventually, and the school would appear much healthier to other potential bidders if the InfiLaw deal fell through.
  • 2010(?) - 2013:  According to Carr, the school has two private colleges approach it regarding a sale/merger, and they also consider a plan to turn it into a non-profit.  These plans fail for undisclosed reasons.
    •  Problem 9:  Again, a lack of transparency.  What were these deals?  What colleges?  Were the founders turning down deals that were good for the business but not good for their personal piggy banks?
    <October 2012:  Talks with InfiLaw begin.
    • Problem 10:  Possible misrepresentations to prospective students.  During this entire time period, CSOL continued enrolling students and accepting tuition payments on 3/4-year degrees without any public disclosures that they were looking to sell the school to outside parties.  If serious talks began in summer 2012, is it not fraud by omission to take tuition payments when you know those students are going to have a problem with InfiLaw ownership of the school, or that it will be a radically different school than advertised?  (from the link:  At one point during the Q&A, an audience member stood to ask a question of his fellow students: "If you had known the school was going to be sold to InfiLaw, how many of you would have applied?" In a crowd of hundreds, nearly none of the students raised their hands.)
    • Problem 11:  I'm not going to argue that signing with InfiLaw is per se bad, but to not control discourse and address students' biggest concerns up front is a huge problem.  Any sale to InfiLaw should have been conditioned on limiting enrollment and other mechanisms to ensure the student body they weren't instantly being demoted to Arizona Summit status, but that's exactly what happened.
    July 25, 2013:  InfiLaw enters into a management agreement that is seen as the first step towards a sale.  Some time prior to this, Sanders and McCullough left the Board for medical reasonsStudents are furious, and at a town hall meeting, boo InfiLaw's PowerPoint presentation and send the dean "anatomically impossible" suggestions via email.  Months of controversy over InfiLaw's purchase of the school begin.

    May 19, 2014:  The South Carolina Committee on Academic Affairs and Licensing votes to reject InfiLaw's license.  Their pretense for vetoing what is supposed to be a rubber stamp is that InfiLaw has two big lawsuits pending against it.  The Attorney General actually issued a press release that more or less says they went outside the criteria.
    • Problem 12:  At this point, we're fudging on paint-by-numbers legal procedure to right the fact that CSOL's founders and the purchasing corporation have the shamelessness to run a law school as they do to maximize their own pocketbooks.  In short, the rule of law is undermined as a correction to the bad faith actors undermining the spirit of the law.  It's not the good faith actor who undermines the rule of law; it's the bad faith actor who thinking the existence of a strict interpretation loophole is the justification for exploiting one.
    June 4, 2014:  Before the Committee on Higher Education could deny its license, InfiLaw suspends its application.

    September 2014:  Westbrook - the guy who actually paid the initial start-up fees - forms a non-profit group to build a viable alternative to InfiLaw.  At this point in time, Kosko and Carr are still supporting the sale to InfiLaw and their defense is that CSOL has a "valid and binding contract" to sell to InfiLaw.
    • Problem 13:  The school's sale is almost certainly conditioned on its state license being active, so claiming there's a "valid and binding contract" after InfiLaw has withdrawn its application seems dubious on some level.  Absent some major stupidity, there's no way InfiLaw wouldn't rescind (and win a rescission case) in this circumstance.  At this point, the guy who actually put money into the school is working to set up a non-profit, while the two guys who didn't put a dime of earnest money in according to published reports are holding onto the InfiLaw sale despite virtually everyone who is not InfiLaw or the two of them being opposed to it.  Also, their failure at this point to seriously consider getting out of the InfiLaw deal and trying to work on a viable alternative seems like a breach of their various fiduciary duties.
    November 13, 2014:  Maryann Jones is hired as CSOL's new president.

    November 21, 2014:  Maryann Jones resignsShe cites Ed Westbrook snapping at her as a primary reason.  Also, students visibly protest budget cuts and furlough threats, demanding to see the budget.  They are apparently denied.


    • Problem 14:  This raises a point about non-owner leadership.  You hired someone who could clearly see what she was getting into, who walked away a week later?  It makes me question all of their hiring decisions, not the least of which would be who was advising these people that signing a deal with InfiLaw as they did and trying to then start strong-arming students out of the blue to accept the deal was a good idea.
    December 2014:  The ABA defers its decision on whether to acquiesce to the sale depending on what the state does.  InfiLaw lobbies heavily to the South Carolina legislature "consistent with what many other companies do in situations like this."  They try to stock the Committee on Higher Education. 

    March 17, 2015:  Buyouts are offered to faculty and staff. Westbrook cites both the $25 million in profit withdraws and an undisclosed amount in consulting management fees to Infilaw as cause of the school's woes.  (Note that C. Peter Goplerud of InfiLaw seems to disagree with the latter).

    March 26, 2015:   In a scathing blog post, former dean Richard Gershon states that faculty members have told him Carr and Kosko have said they would rather close the school than give in to Westbrook's plan.  Gershon claims they their original plan was to transition the school to nonprofit status.

    March 27, 2015:  Ed Westbrook resigns and withdraws from affiliation from CSOL.

    April 27, 2015:  InfiLaw states that has no plans to refile its application for a license.

    May 6, 2015:  CSOL announces it may suspend enrollment.

    Conclusion

    Has there ever been a more blatant example of law-bubble-in-motion than how this school was operated?  Real people are currently paying 6+% interest on money that admittedly went directly into the pockets of elderly prestigious men.  It did not go to the school's operating costs or into the school's long-term investments for future use.  Three fucking years after the first class graduated, they started pulling big money out.  And $25 million over a 3 or 4-year period is significant money for a law school with 150-200 graduates (my back of the envelope estimated operating costs annually would be around $15-20 million or so by other law schools' standards; their actual costs were likely lower).

    I don't care what their intent was.  They started a ridiculous school that had no business existing, siphoned easy money out, and severely damaged the financial future of the enterprise.  By the former dean's account, two owners accelerated their own personal debt payments while saddling their students with increasingly-higher tuition that did not go to the benefit of the school.

    I have more respect for weed dealers.

    Frankly, that's where the take home lesson of Charleston Law should be.  It'd be easy to review the situation and conclude that CSOL's problems stem from its for-profit status.  If we were to do so - as many political elites have - the solution would be easy.

    But it's not that simple.  These men were judges and prestigious attorneys.  They are the same class of men who run law schools nationwide, serving as their administrators, taking board positions, and patting each other on the back or ass, as the situation may call.

    What happened at CSOL can happen anywhere, and it does.  Maybe not $25 million in seeped "profits," but escalating salaries, frivolous expenses, benefits, junkets to God-knows-where places, absurd programs of God-knows-what Law, you name it.

    For as much as CSOL charged, it was far from an abnormal price for a private law school.  Was CSOL simply more efficient that it was able to suck that much profit out in such a short time?  Should other schools get a pass simply because they find other places to put the money?

    If the CSOL profiteers truly believed in social justice and having a law school in Charleston, they would deposit $25 million dollars in a fund to be paid to students who attended CSOL, or, at worst, donate it to a foundation to keep the school running.  But at the same time, true justice would also require budget transparency for all law schools.  Paying 7% interest on money that went straight to The Honorable Somethingorother or his beneficiaries is no better than paying 7% interest on John O'Brien's ridiculous salary or to sweeten already-sweet savings accounts or buying new high-tech gadgets for the entire faculty every year.  And no, this sort of transparency doesn't always come out in Form 990 disclosures.

    Because at some point long before it came out that CSOL's founders behaved like Cookie Monster in a gingerbread house, this shit crossed the thin line from isolated incident to industry trend.

    Someone at the ABA should be looking at this shit way more closely than they apparently do at library offerings or diversity quotas.

    As CSOL swirls, remember that real working attorneys paid for and/or are paying for this shit.  Real fucking people, in the ABA's target demographic.

    49 comments:

    1. ♪ Charleston, Charleston,
      Made in Carolina.
      Some sham, some scam,
      You'll take it up the vagina
      Down in Charleston, Charleston,
      Lord, how they can swindle!
      Ev'ry time they pull
      O'er your eyes the wool,
      Don't believe their bull:
      They've made pocketsful.
      Damn sham, flim-flam,
      Will be a back number;
      But at Charleston, yes, at Charleston,
      That scam school's surely a comer!
      Some time they'll bilk you one time,
      The scam school called Charleston,
      Made in South Carolin'. ♪

      ReplyDelete
      Replies
      1. Here's the soundtrack Old Guy!

        https://www.youtube.com/watch?v=F5y0hSqO48U

        Delete
    2. Excellent summation, LSTC! Thank you for the timeline, and documenting the pigs' behavior. In the final analysis, it is ALL about the money. I have said it for years, but it is especially pronounced at this toilet: the law school swine DO NOT GIVE ONE DAMN about the students, graduates, or taxpayers.

      ReplyDelete
    3. Tremendous timeline and commentary-- comprehensive and witty as usual.

      One more notable fact, or at least alleged fact, about the two board members of the original five who left last year:

      "McCullough and Sanders retired in July, just days before the owners announced that they had entered into a management services agreement with InfiLaw. They later said a sale was in the works. Hall [n: Infilaw's lawyer] said InfiLaw also advanced the school $6 million to buy out Sanders and McCullough."

      http://www.postandcourier.com/article/20140525/PC16/140529595

      Of the five original board members, it appears that only Westbrook was sincere about anything other than stuffing his pockets with millions of dollars-- the fruit of the debt slavery and blighted careers of kids who trusted them. I do feel bad for the students and alumni, who did such a fine job of organizing against the proposed InfiLaw sale. But, on balance, they seem horribly naive. They were so attentive to the prospect of profiteering and greed by a Florida-based corporation backed by Chicago-based venture capital, but so blind to the friendly predators in their own backyard.

      http://www.cntraveler.com/galleries/2014-08-04/friendliest-and-unfriendliest-cities-in-us/10
      [ranking Charleston, South Carolina as the friendliest city in the US]

      ReplyDelete
      Replies
      1. I agree. The kids seem to be totally naïve but I honestly don't believe that many people in the early 20's would have the necessary sophistication to see through the smoke and confront the scam for what it is. I went to law school in the early 80's and believed the law school administration when I was told I was special and I thought I was smarter than most everyone when I received a scholarship. Now in my mid-50's, I realize that I didn't receive a scholarship, but the stated tuition was really the real tuition plus amount needed to entice some higher LSAT scores to come to the law school. I realize now that my alma mater stacked the sections so about only one-third of the scholarship recipients kept their scholarships. I realize now that the law school engaged in deceptive advertising regarding their employment stats and that the careers office only helped the students who did not any assistance obtaining a job. I realize now that the law faculty was (and most are still) conveniently and theoretically liberal but very willingly participate in the country's largest professional income gap producing machine which disproportionately destroys the lives students who come from the lower and middle classes. I realize now that the teaching faculties participation is very likely based on their realization that most law professors really have few marketable skills, and they need to retain a job at all costs in which their professional self-worth is determined by nebulous factors like SSN downloads rather than by profits per partner, hours billed, or cases satisfactorily concluded. I could not have known all of this in my early 20's and even if I read a bunch of postings by anonymous scamblogers, when you go into those law schools, and see all those happy people in administration who pour those honeyed words in your ear.......

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      2. This statement needs to be highlighted:

        "I realize now that the law faculty was (and most are still) conveniently and theoretically liberal but very willingly participate in the country's largest professional income gap producing machine which disproportionately destroys the lives students who come from the lower and middle classes."

        As long as they talk the correct talk, it doesn't matter how evilly they walk the walk.

        Delete
    4. I think Charleston is closing up shop because the federal government is onto them.

      In July, for-profit law schools will be subject to a new, Gainful Employment rule from the DOE/ Obama admin. The rule states that programs that have high debt-to-earnings ratios amongst graduates and/or high cohort default rates lose federal funding.

      A graduate is "gainfully employed" only if her debt is no more than 12% of gross earnings or her debt is no more than 30% of annual 'discretionary income.' They do amortize the debt out over repayment to make the comparison, but even so, THESE SCHOOLS ARE DONE.

      It appears this rule is RETROSPECTIVE - they are looking at the most recent already graduated classes, and 3 years of failing the rule gets you cut off from federal funds.

      Part of the rule is a disclosure requirement and all the for-profit law schools now have web pages of identical format to comply with the rule (part of which is a disclosure requirement):

      Charleston's GE Website:
      http://charlestonlaw.edu/Admissions/Gainful-Employment-Disclosures.aspx

      Florida Coastal GE Website:
      https://www.fcsl.edu/content/gainful-employment-disclosure

      Arizona Summit GE Website:
      https://www.azsummitlaw.edu/gainful-employment-and-aba-required-disclosures

      John Marshall GE Website:
      https://www.johnmarshall.edu/gainful_employment_disclosure/jd/Gedt.html

      IT IS ON!

      We need a White House petition urging the DOE to clarify that the Gainful Employment rule APPLIES TO NON-PROFIT PROGRAMS.

      As far as student debt:income is concerned, there is no vast difference between for-profit and not-for-profit law schools and the GE rule should apply to everyone.



      ReplyDelete
      Replies
      1. This is kind of interesting. The Charleston gainful employment disclosure states a placement rate of 83%. The others have an asterix and say they are not required to calculate a placement rate. This looks like a more misleading disclosure than the ABA data as far as placement goes, so I am not sure it would help to have every school have these,

        Delete
      2. The GE rule is not officially in effect until July, 2015.

        There was some question previously as to whether for-profit law schools would be subject to the rule. The appearance of these identical websites confirms the Dept. of Ed. has told them they are subject to it.

        It's better than just a disclosure rule. These schools are on borrowed time. Their graduates do not earn enough relative to the debt.

        Delete
    5. And oh, btw, here is an InfiScammer freaking out that if the GE rule applied law schools, Infilaw would shut down:

      http://thehill.com/blogs/congress-blog/education/235549-gainful-employment-rule-could-harm-law-schools

      YES! That's what we want!

      ReplyDelete
    6. LSTC, a superb takedown - one of the best I've ever seen here. Wonderful and awful at the same time.

      The writers here may wrap their commentary in the witty and cutting, but underneath is a fat fucking pile of absolute truth.

      MORONS WHO ARE ABOUT TO ENROLL IN LAW SCHOOL THIS SEPTEMBER: JUST FUCKING DON'T! SERIOUSLY, THE SHIT YOU READ HERE, IT'S NOT FAKE BULLSHIT COMMENTARY. IT'S WRITTEN BY GUYS AND GIRLS WHO HAVE BEEN THROUGH THE MACHINE AND WHO KNOW HOW THE FUCKING LEGAL SAUSAGE IS MADE.

      The whole "Charleston School of Law is the rectum of its existence" thing got me laughing. What a great idea for a new ranking system. The first tier - Harvard and Yale - are tasty pieces of filet steak in the mouth, absolutely delicious. Second tier, they're in the stomach, some making me slightly nauseous, some perfectly ok. Then there's the third and fourth tiers, where I know a shit's a-brewin'. Some are forming solid turds, but they're still turds. And some are liquidifying into rather loose stools. A few are the initial rumblings of post-cheap-Indian-takeout diareah (sp?), while places like shITLS and CSOL are giant farts in the rectum that are guaranteed to "surprise" you when you blow them out, accompanied by a hot squirt of juice that somehow doesn't even smell like shit, but fish or something. (Amirite guys? Hi-5, we've all been there and sniffed the TP!)

      Fuck these cunts. Seriously, fuck these so-called judges and lawyers and investors and simple pieces of absolute shit who did this.

      Future 1Ls - it's on you now. It's on you.

      ReplyDelete
    7. If I had just finished my 1L year at CSOL, I'd attempt to transfer immediately or if that were not possible, I'd drop out and go for an MBA. If you are going to be a 2L this coming Fall, you have no idea if the law school is even going to exist for your 3L year and your law profs won't have time to prepare lectures or grade papers when they are sending out their CVs every day, trying to locate that extremely high paid job in the prestige firm that they forsook in order to teach at CSOL.

      If you just finished your 2L year at CSOL, you're probably fucked. Does anyone have any suggestions?


      ReplyDelete
      Replies
      1. Yeah, if you're a rising 2L, take a leave of absence and hope the school closes in the meantime. Get your Closed School Discharge. Walk away. That's my advice.

        Delete
    8. LSTC with Sniper Rifle: (pause) KA_BLAMM!!

      Law School Bandit from Borderlands: the Pre-Sequel: He was INN-O-CENT!!

      You've been PWND Baby!!

      ReplyDelete
    9. Where I disagree with you is that you have your rage focused on the wrong people. You seem to be mad at the school's founders, but that anger is misplaced. I almost admire the founders. They didn't really do anything wrong; in fact, they were innovative, cunning, and "saw the forest through the trees." As much as it is in vogue to hate on wealthy people, the truth is that money is made through many happy customers. And these guys had many happy customers. People lined up to get in this school. As you mention above, they started with ~125 students, and that was BEFORE THEY WERE EVEN ACCREDITED by the ABA. Who were these idiots that enrolled? I don't know, and I don't care. But they were happy idiots. They applied to this brand new school, got accepted, and then they hung their acceptance letters on their refrigerators, posted their acceptance letters on facebook, and were, in general, really proud of themselves. Most of these kids never would have gotten into a law school otherwise (I'd guess the average LSAT score was 130). So, the founders of the law school gave hundreds of people their dream, by admitting them into law school.

      The real problem is that there was federally guaranteed money for people to enroll in this dump. If people had to pay for this school out of pocket, then no one would have gone. Again, if the laws of supply-and-demand were not altered by the federal government, then this school would never have been able to start up. But our federal government has determined that higher education is priority, so it "encourages" (in some ways financially forces) people to enroll in these schools, when in reality, they are not that beneficial. But like the anyone who knows a little about communism, the major flaw to it is that governments aren't knowledgable or adept enough to tell people what/where to work. It's always 10 steps behind.

      The other problem is that the profession itself is kind of a scam. It exists primarily only through its artificial barriers to entry. It used to be prestigious because it was selective, and only wealthy children went. Once they started accepting based on diversity rather than merit or, more importantly, wealth (I have a feeling you might scratch your head here, but trust me, its true and its not a bad thing, but for the sake of brevity i'll leave the explanation for another time), then, like anything the general public gets its hands on, it goes to shit. And that's what's happening to the law.

      But again, stop the federally guaranteed money for these shitholes, and the shitholes will stop.


      ReplyDelete
      Replies
      1. Blame the banks forf what the bank robbers did? You are an enabling tool, either jealous you weren't in on the scam or that you haven't figured out one you can be involved in. You obviously need to become the victim of a scam so you can see who the real scammers are. And sure reform the federal system - that's already begun to happen. Get up to speed by targeting the real perps.

        Delete
      2. There is apparently a whole group of people like 9:35 who like targeting and taking advantage of "happy idiots." It reminds me of the Goldman Sachs "muppet" remark - clearly if exploitation is not illegal, then it's full speed ahead, amirite? It's not enough that it may be morally or ethically repugnant; it's "if they are willing to be scammed, then you're a fool not to scam them."

        God bless 'Murica.

        Delete
      3. I really need to find out what tailor these elderly white guys use, what suits make this subset totally averse to calling out nefarious behavior.

        The entering class(es) had a 151 median LSAT per one of these articles. I don't know why they went to CSOL, but most of them had options, and, in any event, it's irrelevant. Happy idiot, sad idiot, whatever, it's not acceptable behavior. People who receive bogus medical treatments are often happy idiots, but that's not a defense to medicare fraud; of course, the government takes medicare fraud seriously, and it's not like the happy idiot patient winds up paying non-dischargable debts 20 year later.

        Delete
      4. "...the truth is that money is made through many happy customers. "

        The whole point of the scam is that these customers are only happy until they realize what they got.

        -Barry

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      5. "stop the federally guaranteed money for these shitholes"

        Great idea. Who is standing in the way of it?
        http://www.propublica.org/article/higher-ed-lobby-quietly-joins-for-profit-schools-to-roll-back-tighter-rules

        Delete
      6. I understand what this commenter is saying. The founders of the school are morally repugnant, but they are entrepreneurs who at least started out with the dream of building a semi-reputable law school. Definitely different from Infilaw which set out to scam idiots on almost an industrial scale.

        I think the under-criticized actors in this drama are the professors. It's quite amusing to hear them crying about the unjust actions of the founders. They did not care one whit about what the founders were doing as long as their paychecks were clearing. For-profit education seems like it can be controlled with appropriate levels of regulation and scrutiny. The professors just seem like irredeemable parasites.

        Delete
      7. Hey, I'm the original 9:35 commenter. I just want to say that I AM a victim. I went to a shit law school. Not nearly as shitty as this one, but it was tier 3 (ranked in the bottom half of the top 100).

        I have some specific responses to you guys:

        4:41 said "...And sure reform the federal system - that's already begun to happen. Get up to speed by targeting the real perps." Has reform of the federal system begun to happen? I don't know of any reforms. Also, consider this: when people died in WTC or their homes wrecked by tornadoes or hurricanes, or even for things as simple as food stamps or welfare, the government has checks in place and requires proof of need on a continuing basis. They don't just hand the money over. But for student loans, it's practically a blank check.

        In response to 6:42, who said "There is apparently a whole group of people like 9:35 who like targeting and taking advantage of 'happy idiots'....It's not enough that it may be morally or ethically repugnant; it's "if they are willing to be scammed, then you're a fool not to scam them." Remember, as I said above, I am a victim of the law school scam...that's why I peruse these boards. But I disagree that the major culprits are the law school deans and founders. They aren't the reason that law graduates can't get jobs. Law grads can't get jobs because the market doesn't need so many lawyers. Supply-and-demand is REAL thing, like gravity. What goes up, must come down...when supply is greater, demand is less. Actually, the law school founders and deans kind of fulfilled their promises. They promised a legal education, a diploma, and eligibility to sit for the bar exam. That's it, and that's what the students got. [*Note: I agree with you that they engage in shitty conduct such as fudging employment statistics, bait-and-switch scholarships, and several other shady practices, and this leads to the implication that you will get a job out of law school, but I don't agree that this is the root of the problem. In any other industry, these practices are called "marketing" (no one is going to tell you that their product sucks). So again, I agree with you that these tactics suck, and need to stop, but I disagree that it is the root problem.] Again, these founders and deans more or less fulfilled their basic responsibility: they eventually got ABA accreditation and their customers (students) were able to sit for the bar exam.

        You want to punish Founder Bob and Dean Smith, but the truth is If they didn't open this school, someone else would have. But as I said, the problem is that the money is there. The incentive is there. That's what the government wants them to do. It has decided that higher education is a priority for its citizens/lemmings. But the problem is that, as history has shown, government is an inefficient dictator of the market. Again, if people had to pay for law school out of their own pocket, I don't think most of these junk schools would have opened.

        To 8:06, who said "Happy idiot, sad idiot, whatever, it's not acceptable behavior." I just want you to know that I am an idiot also. I went to law school, struggled to get a job, and am so far away in life from where I expected to be that I get depressed and peruse these message boards looking for some kind of consolation.

        Lastly, to everyone, the final paradox we need to answer is whether the legal profession should be exclusive at all. That, I believe, is the intention of these unlimited government funds; i.e. to make so many attorneys that it is no longer an exclusive profession, and maybe barely a profession at all. Is this a good thing? I don't know the answer to that one.

        Delete
      8. Hi, new commenter interjecting here.

        We're all victims of the higher ed debt matrix, but I want to dismiss this notion that government loans themselves are to blame. The OP is suggesting that simply making the money available is the problem. If you want to talk supply and demand, ask why there is insatiable demand for higher ed loans.

        Today credit in its various forms is so easy to get, people don't need to go to college simply for "free" money. Massively cutting back student loans could help temper college prices, no doubt, but they can't do it because the populace at large would absolutely freak. Everyone has been brainwashed into believing that your future is sunk without a higher ed degree.

        Going to college is a story we've all been told our entire lives, it was a foregone conclusion, the natural extension of how we were raised. In every school in America, the assumption is that every student will attend at least some college. Could you imagine the backlash if a school said it wasn't trying to send its students to college?

        School more or less was our lives for apprx the first 20 years. It is an institution that raised us in many ways, and was only presented as something benevolent and good. And to be betrayed in the end, to be absolutely swindled by the system that we were told only to trust, makes the situation all the more devastating.

        This is why student loans and law school loans get people so upset. This is why we blame the administrators and professors. They tasted the student loan blood and became drunk and overindulgent. They were the ones who raised the prices; the unlimited loans only came later to meet their insatiable greed. To fund their good life today, they've hung a trillion dollar+ loadstone around the necks of the next generation.

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      9. New commenter (7:41) - this is a great articulation of why the higher education scam hurts emotionally, not just financially. We were betrayed and grifted by the people and institutions who supposedly were the benevolent keepers of wisdom and knowledge. And I feel as if these players were knowingly conning me for as far back as I can remember - at least from junior high school onward.

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      10. "the truth is If they didn't open this school, someone else would have"

        Yeah, that's actually not true at all, and were it true, it doesn't mean the alternative school would have been for-profit with the prospect of individual greed driving the school into the ground.

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      11. Original commenter here....

        For the past three commenters, especilaly (7:41):

        I think you make a great point. I love almost everything you say. You're right, we were lied to and taken advantage of. As commenter Adam b. says, that hurts emotionally. I feel the same way. I spent so much of my life working hard to get into law school (e.g. good grades, "staying out of trouble", etc.) and for what? I have friends that barely graduated high school or took 6+ years in undergraduate, and they are doing 100 times better than working public sector jobs or private, non-law jobs. I'm a year removed from law school and I'm still and hourly employee (my hourly rate, luckily, has been moved up) but I make less than my friends who did not do nearly as well as me in school. It hurts me everyday. And not jealousy for my friends, I'm happy for them, but I just feel so embarrassed that I worked so hard, and I feel like there were many opportunities in life that I missed chasing this mirage called a legal career. Adam B. is also right, the scam goes back years, to junior high school.

        But related to that, it isn't just the law school founders who perpetuated this scam. It was my parents, my teachers, my friends and neighbors. Almost everyone drank the cool-aid. But worst of all were the lawyers in the profession. So many of them told me "congratulations" when i said I was going to law school. They patted me on the back, and told me how law school was going to "teach me to think like a lawyer" and all this other bullshit. How could they do that? They must have known it was bullshit; they were in it. Only one guy really ever said me "don't go," but that was a week before I enrolled, and it was too late.

        On the other hand, I have single-handedly deterred about a half-dozen future law school students. I tell them, emphatically, "NOOO". Why didn't the older generation offer me this same honesty? I don't know, and it hurts everyday I show up this this shitty job.

        Finally, back to my point a little. I feel like many people are blaming the administrators just because they are wealthy. I blame them for fudging employment stats, bait-and-switch scholarships, and general deceit, but I recognize that in pretty much any other industry this is called "marketing."

        Commenter 10:37 is getting hung up on the for-profit vs non-profit structure of htis law school, but I'm not sure why it matters? They both would charge a high tuition, and both would leave graduates unemployed. As I said before the problem is the surplus of lawyers caused by federally guranteed funds. The founders of the law school just did what you and me want to do...make a profit. Now, were they kind of dicks about it, yes. But they are lower on the totem pole then most people make them out to be.

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      12. 12:22, not many here will disagree with you that the federal loan system is a big problem. That does not mean the individual actors in the system (for-profit/non-profit/whatever) are absolved of abuse. You are flat-out naive if you believe that all individual actors in bad systems exploit the system equally. Believe it or not, there are actually good administrators in legal education. Heck, only 2 of the 5 CSOL guys appear to be wanting to suck every dollar out.

        Did you even read and understand the original post? I say rather explicitly the for-profit thing isn't the end of the inquiry.

        That said, answer me this: how many law schools had $25 million in cash withdrawn for the benefit of individual owners in the last 5 years?

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      13. I see your point about the individual actors. Also, I'm not sure if you are the guy who wrote this website...if so, I just want to say I liked the article you wrote above. I think you did a great breakdown of what happened, how it happened, etc.

        Anyway, the point we still disagree on is twofold:

        First, when you say this "how many law schools had $25 million in cash withdrawn for the benefit of individual owners in the last 5 years?" I don't get why that's relevant. Every law school, regardless of how much money some of their founders extracted, is facing the same problem as them: their graduates don't get jobs. Even if they reinvested that money in the school, what would they have done? Hire a few more "prestigous" faculty? Re-furnish the library? Pleaseeeeee. That is not going to lead to any more students getting jobs. Because the founders' personal profits are not the real problem. The real problem is that there are too many lawyers (and maybe also that the profession itself is a scam, but I haven't given that statement enough thought to really be firm about it).

        Do you not think that these guys fulfilled their basic obligation to their students? They provided them with a law school (remember, I bet most of these kids couldn't get into other law schools), which allowed them to sit for a bar exam. Believe it or not, that is the basic obligation of law school. Now, I agree that most of the schools fudged employment statistics, used bait-and-switch scholarships, and surely led people to believe that the legal market was good when it wasn't. But again, in any other profession that is called "marketing." Also, they were not alone. I, personally, didn't go to law school because the founder of the law school told me it was a good idea. I went because my parents told me it was a good idea, and so did other lawyers, hollywood, my neighbors, current law students when I toured the place . They all said it! And that's what convinced me to go.

        And I just want to reiterate that I'm not arguing with you to piss you off. I like what your doing here, just throwing in my two cents.

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      14. "Even if they reinvested that money in the school, what would they have done?"

        I could think of plenty of things they could have done with that money to benefit students. How about reducing tuition? How about offering a free bar exam review course? How about book scholarships? Anything to reduce the debt and financial damage would be a welcome development.

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    10. By threatening to cancel this year's entering class, Charleston has sealed its fate. Charleston has advertised a willingness to fuck over the many people whom it has already admitted. It has shot its reputation. If suddenly it announced that it was going to carry on after all, few people would be ass enough to trust it. Even if it wanted an entering class this year or next year, it wouldn't get one now.

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    11. Looks like Kosko is going to need his scam profits. According to LG&M, he just lost his job as a Federal Magistrate down in South Carolina for making disparaging comments about women and Asians. What a guy.

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      Replies
      1. The Hon. George "Costco" Kosko just lost his job? Ain't that a bitch!

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      2. Actually, I misread the LG&M post. He lost the Magistrate gig back in 2008. Maybe that was the reason he decided to start cashing in $25 million in chips in 2010.

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    12. "Should other schools get a pass simply because they find other places to put the money?"

      Steve Freedman: "Hey, come on guys, at least KU Law is not 'as bad as' CSOL! Now is a great time to apply...!"

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    13. If Congress would impose a 150-minimum LSAT score to get Federal student loan money, a lot of the problems with lawscam would instantly disappear....

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      Replies
      1. Agreed. But it would never fly because blacks and hispanics score lower onthe lsat and it would be seen as discriminatory

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      2. If it required that at least 50% of the class be working at federal clerkships or jobs in Big Law ten months after graduation, only 13 law schools would qualify. Shade that to 40%, and still only 16 would qualify. Even at a lousy 10%, only 78 law schools—barely one in three—would make the cut.

        Source: http://outsidethelawschoolscam.blogspot.ca/2014/12/guest-post-by-old-guy-which-law-schools.html

        Why make arbitrarily large student loans available for law skules from which almost nobody, or even nobody at all, gets a job with reasonable prospects of supporting the payments on those loans, at least for a few years?

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      3. Exactly. And with every,new graduating class the oversupply problem is worse by 45,000. It's completely fucked, and if you pay attention to what the schools ARE STILL basing their claims grads are employed upon, you will notice they base it on nothing. Not even survey data. I guarantee you it is shot through with 'inaccuracies" AKA fraud.

        That's why the ABA disclaims its accuracy when it republishes the data. It's NOT RELIABLE. So, even assuming a fair amount of fraud and padding, you're looking at horrific prospects.

        Anyone going off to law school now is a drooling moron even if he got a 180 on the LSAT. It's fucking stupid.

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      4. Well, 6:29, that's a bit too strong. Rich kids with connections might do well to go to law school. Other people should be very careful. Even Harvard and Yale are not necessarily wise choices nowadays.

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      5. It is not too strong, Old Guy. Having a wealthy family does not produced a job for a child in an industry with no demand. It might produce some kind of job, but if you've got those kinds of opportunities to get paid without wasting 3 years of your life and some amount of money - they won't cover COL - why the fuck would you go to law school?

        Forget even getting Job #1, lets talk about why one would aim to enter a distressed industry in the first place. MBA is accepted for a much wider variety of jobs than a JD is.

        So, yes, particularly if one has a great variety of non-merit-based options, he'd be a drooling, fucking moron to go to law school right now. After all, is the question WHETHER one should go to law school if his other option is the state pen, OR is the question whether one should go to law school because it enables earnings power and possibilities one could not obtain in another way.

        Yeah, they're all dumb as fuck.

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    14. Remember, parent institutions ("owners") have been taking their $25,000,000, just like these guys have.

      Law school students have been subsidizing parent institutions. Parent institutions have been accessing the student loan conduit in the same way.

      Just ask the folks at the UMd School of Law.

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      Replies
      1. More importantly, as the article points out, not-for-profit law schools do the same thing. The difference between not-for-profit law schools and for-profit law schools is of questionable relevance: the former merely siphon the money off through "forgivable loans", inflated salaries, derisory workloads, sabbaticals, travel, and so on.

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    15. Holy cow, watched that video. To paraphrase the speaker: "You need to go grovel to Infilaw to come back if you want to have jobs next next year. And then publicly beg them to come."

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      1. I love how it's always up to the employees. "Well, we screwballed the deal, but its all your fault and now all you lowly employees need to clean up our mess and get Infilaw back in here."

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      2. Exactly; am I correct to assume the person giving the speech was one of the owners? Because, if so, I wish someone had mentioned how they had allegedly pulled 25,000,000 out of the school that could be used to keep it running while.

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    16. Yee hah! Take that scamprofs!

      Another one bites the dust! No sane person should enrol in law school now, not with this ongoing collapse.

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      1. I almost feel bad for the scamprofs, because in the video its the Boomer-suits who stabbed everybody in the back, but, then I think...naw, no way. They knew this was coming. They knew that graduates were being screwed left and right for decades, but they willfully, blindly went on with their lives as if the foundation wasn't crumbling,

        "Sophisticated consumer"-turnabout is fair play. Welcome to how the other half live, scamprofs.

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    17. The Faculty. I'll be watching their Linkedin accounts to see where they land.


      Abrams, Andy
      Anastopoulo, Constance
      Boyd, James
      Bridwell, Randall
      Bruno, Todd
      Compton, Amanda
      Derfner, Armand
      Eberle, Kevin
      Finkel, Gerald M.
      Gammons, Debra J.
      Grant, Kirkland
      Gutting, Kristin
      Janssen, William M.
      Klein, James M.
      Lawton, Margaret M.
      Lund, Paul E.
      Marcantel, Jonathan A.
      McCullough, Elizabeth
      Mendales, Richard
      Merkel, William G.
      North, Jennifer
      Phillips, Kimberly D.
      Roig, Jorge R.
      Schreck, Gordon D.
      Shealy, Miller
      Shuman, Virginia
      Smith-Butler, Lisa
      Stuart, Allyson Haynes
      Vargas-Vargas, Geiza
      Want, William
      Williams, Aleatra
      Zisk, Nancy

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